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Swimming upstream

Streaming technology seems to be a bridge between TV and PCs--until all the difficulties behind the technology are brought to light.

SAN FRANCISCO--At the first Streaming '98 conference held here last week, convergence loomed large over the audience as the Holy Grail of the streaming media industry.

In one sense, streaming audio and video over the Internet already have made a great stride toward convergence with traditional broadcast media: With the advent of streaming media, the Web started to look and sound more like television and radio.

But as simple as the marriage of old and new media sounds on paper, the specific tasks of bringing together the traditional broadcast and Internet content industries--their infrastructure, protocols, and hardware--are daunting.

Before the nascent industry makes significant inroads on traditional broadcast media markets, battles loom on standards, bandwidth, the development of viable business models, and the resolution of intellectual property issues.

Streaming media to serve TV--and then swallow it
Streaming industry insiders differ on what exactly this convergence promised land will look like once it is found, and how long it will take to track it down. But most agree that it will have a profound effect on both merging industries.

"There will be a slow convergence of digital television and the Internet, but it will be a decade or more before...that happens," Zona Research research associate Greg Tapper told Streaming '98 participants in a panel discussion. "But when it does happen, TV as we know it will be gone."

So far, despite studies showing the Internet as a whole siphoning off traditional media consumers, broadcast industries have treated streaming media as tools to be exploited rather than as threats. An overwhelming consensus among old and new media professionals alike is that the only significant point of convergence between television and the Internet for the present and the near future is the use of streaming to augment traditional on-air programming.

This current auxiliary role of streaming media illustrates one of its primary benefits: Whereas television and radio are rigidly time-constrained, Internet multimedia content is held back only by the limitations of server and bandwidth resources. That gives broadcasters the opportunity to post complete materials, such as President Clinton's videotaped grand jury testimony or independent counsel Kenneth Starr's report on the White House sex scandal. The complete materials serve to augment the limited coverage provided in an evening news broadcast.

In addition to depth and background, streaming media offer users choice in when to watch it.

"The single most important thing the Internet has going for it is being on-demand," said ZDTV president and chief executive Larry Wangberg during a Streaming '98 panel discussion. "I don't have to wait for some programmer in Hollywood to tell me when to watch something. This gives users control the way the automobile did...suddenly the driver is in control."

For some broadcast television businesses, streaming media have been recent additions to existing programming. CNN Interactive, for instance, averages 100,000 multimedia streaming requests per day, and topped 1 million hits per day for its posting of the Clinton testimony and the launch of the space shuttle with Sen. John Glenn.

For recently launched television operations such as ZDTV, streaming over the Internet was a key part of the original programming plan.

"The company realized there was a real business opportunity with the coming convergence," ZDTV's Wangberg said. "There was a real need for video to go along with Web content."

Companies using streaming within the consumer marketplace are largely those that produce video- or audio-based content in the first place. According to Forrester Research, TV-oriented companies lead the pack, followed by music sales, radio, sports, and film firms.

The streaming market opens up niches for small Net firms that want to get in on the TV act. One such company is UltimateTV, which uses streaming media to provide online sneak previews to television shows.

Indeed, much of the promise for streaming video in the near future is in promotion. Full sound and color can create compelling ads and higher click-through rates for advertisers across the product spectrum. Streaming media producer Veon reports click-through rates of as high as 20 percent for multimedia banners--a stratospheric leap over traditional banner click-throughs.

Rich media: An oxymoron?
But while streaming media may make for better ads, ad revenues are not covering the high cost of serving streaming media, analysts argue. Gallows humor about streaming losses was virtually de rigeur at Streaming '98 sessions.

CMPnet Internet Broadcasts executive producer Gary Brickman suggested that the industry "should expose the oxymoron of 'rich media,'" and call it "impoverished media" instead. BBC project director Bob Eggington quipped that for-profit news organizations serving streaming media had adopted the BBC's business model of public-service broadcasting.

While most firms are not turning a profit on streaming media, they certainly expect to do so.

In a recent survey, Forrester Research found that 79 percent of sites serving streaming media content expect to make money off the venture through advertising. Thirty-six percent expect to earn money from sponsorships, and a comparable number plans to use streaming media to help them sell products. Promotions, subscriptions, syndication, pay-per-view, and other models make up the rest of the intended business models.

But Forrester analyst Seema Williams called those expectations "unrealistic," particularly when it comes to advertising. Subscriptions for "hard-to-get" content, like certain sports or news material, may pan out, she said.

Forrester's study also canvassed content providers on their biggest streaming headaches and found a wide diversity of comparably vexing obstacles. Lack of adequate bandwidth on the user end was the No. 1 problem, cited by 17 percent. The use of plug-ins and lack of technology resources tied for second with 12 percent each. Scalability scored with 7 percent; copyright and encoding problems were named by 5 percent each.

"There's not just one roadblock here," Williams observed. "There isn't a silver bullet we can aim at some monumental issue. There are a lot of things wrong with this market that prevent it from taking off."

One industry is turning a profit with streaming media, however, but it's uncertain whether traditional content providers will be able to match its success.

"The adult entertainment world is doing quite well," Williams said, noting that content for the $1.2 billion online sex industry consisted of roughly one-third streaming content. "There are definitely subscription models that will work."

Streaming sex on the Web could serve as a catalyst for the rest of the entertainment industry. Such a scenario would not be without precedent; one commentator noted that videocassette recorders won quick adoption in the 1980s in part because of the convenience and privacy with which the new technology enabled consumers to view pornography.

Another space in which streaming media are expected to do well sooner rather than later is in the enterprise. There, the convergence of various telecommunications, job training, and customer support technologies is expected to drive streaming media adoption at light speed compared to the consumer pace.

Universal messaging, conferencing, training, telecommuting, and next-generation call centers are high on the list of streaming-intensive enterprise initiatives, said Judy Estrin, chief technology officer and senior vice president of Cisco Systems.

Problems on every front
Estrin, who was president and chief executive of streaming firm Precept Software before Cisco acquired it, had harsh words for the current state of the streaming industry on the bandwidth, standards, and quality fronts.

"Poor video is worse than no video," Estrin said. "The Clinton clips were embarrassing for our industry. There's a barrier below which it's better having audio and slides. Poor video slows acceptance in the market."

Also hindering market acceptance is a lack of standards for streaming servers and players.

"There has not been enough effort in the industry to try to resolve this problem," Estrin said in her Streaming '98 keynote address. "It's true in in any immature industry, but we're at the point when we're going to impede our growth."

Some observers note that while there is no standard for streaming multimedia, a considerable consolidation has brought the industry closer as Microsoft and RealNetworks have swallowed up smaller players.

According to Forrester's survey, Real technology is the choice of 66 percent of streaming media providers. Microsoft's NetShow technology is a distant but gaining 26 percent. Apple's QuickTime has 4 percent.

Bandwidth may prove to be streaming media's most intractable problem.

The major bandwidth challenge is the so-called last mile, or the point at which the end-user receives the stream. The industry is looking to high-bandwidth technologies such as cable modems and digital subscriber lines to help relieve the crunch, but analysts advise streaming media firms not to hold their breath.

"Forrester sees high bandwidth as significantly far away," Williams said. "We predict 16 million people connected by cable or better by 2002, and that's not exactly around the corner."

But even an infusion of raw bandwidth won't solve the problem, Cisco's Estrin argued in her keynote. Instead, bigger pipes into the home will have to be combined with technological strategies like caching--serving copies of the content closer to the end-user--and multicasting.

Multicasting, a little-used Internet protocol now gaining some momentum, serves content in a way that resembles a cable transmission. In a multicast, content distributors send out a single signal that end users tune into, rather than fielding thousands or millions of individual client requests. Multicasting is easier on networks, but robs streaming multimedia of its category-killing "on-demand" trait.

Everything that rises must converge
The true convergence of old and new media through streaming may lie in as-yet-unbuilt or perhaps only unperfected products.

"What we're waiting for is when the devices actually converge," said CMPNet's Brickman, pointing to Microsoft's WebTV as a step in that direction. "Nothing's going to happen until the PC becomes easier to use...When we can deliver Internet-based content to the TV, then we're going to be in business."

Cisco's Estrin agreed that Internet technology has to become more user-friendly before any widespread consumer convergence can take place.

Current technology is "too complicated to move beyond the technological elite," Estrin said. "Electronic books, dedicated browsers, new appliances we haven't even thought of--that's what's going to be what's driving all of this."

For its part, Cisco is studying "at a very high level" ways of distributing video to various parts of the home from single sources, Estrin said.  

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